Saturday, July 9 2005 17:10 Hrs (IST) - World Time -

Bangalore: What does it take for India's booming Information Technology (IT) services industry to retain its competitive advantage?

Or for that matter, what could bring its downfall Experts sought to put things into some kind of a perspective at a panel discussion on 'Strategies for leading companies to succeed in offshore outsourcing' at the launch of a book 'The Offshore Nation', co-authored by Atul Vashistha and Avinash Vashistha in Bangalore on July 8, 2005 night.

Is India, which accounted for 44 per cent of the global offshore outsourcing at US $17.2 billion in 2004-05, the only solution?

No, says Sudip Banerjee, President of Wipro Technologies. "It can never be India only. Philippines, Vietnam and Russia are catching up", he said.

India needs to continue to keep the cost down; quality is eventually going to be the differentiator.

Indian IT services companies need to push the bar constantly and go in for all the quality certification to stay ahead of the race; that will go towards ensuring sustainable advantage for India in the sector, Banerjee feels.

Chief Operating Officer of MindTree Consulting Subroto Bagchi said infrastructure, health, terrorism and politics are closely linked to the future of Indian IT industry.

A health epidemic in Bangalore similar to the kind witnessed in Surat many years ago can easily destabilise the IT industry in this city, the hub of software activities, says Bagchi.

"A water epidemic is waiting to happen in Bangalore", he said. While industry will do its job, what the country's political leaders do relating to the sector would certainly have a bearing.

Managing Director and Chief Technology Officer of E4E Labs, Sridhar Mitta, sought to underscore the advantage of replicating in the Indian software sector the Taiwanese model on manufacturing.

Taiwan has adopted a cluster approach, which allows each player to concentrate on each area avoiding each player doing a similar job -- and doing 'volumes' for the globe.

Similarly, it makes sense for Indian IT vendors doing the same kind of development work to join hands, avoid doing the same thing and concentrate on different specialised areas. That will have a synergising cluster effect and also lower overhead costs.

Director of Software Technology Parks of India, Bangalore, B V Naidu, expressed the view that secondary cities hold the key to India retaining its competitive advantage.

While main cities are witnessing increase in the cost and attrition rates, secondary cities, where the costs are lower by eight to ten per cent, need to be energised, he argued.

Banerjee said Indian companies have great domain skills and some of them are focusing on niche areas; and vendors are ready to pay the differentials.

He said the mystique of offshoring has gone; and clients are increasingly seeing vendors as strategic partners. Offshoring is no longer a low-cost issue; it has become a strategic imperative for the vendors.

Founder of Nishit Desai Associates, Nishit Desai, said the expected opening up of labour market in key countries would create 'new dynamics'. Singapore has the potential to climb great heights in future, he felt.

Managing Director of General Atlantics Partners, Abhay Havaldar stressed on reengineering and industrialisation of services for India to enter the next level.

Bagchi warned that a lot of people 'small and disparate' at this stage want to see India fail and laid stress on pre-emptive steps.

Mitta said the overseas vendors have realised that cost of developing technologies and processes are lower in India by multi-fold.

According to Avinash Vashistha, Neo IT's Managing Partner, centres of excellence are emerging in other parts of the world; the Philippines for example, for the call centre business.